European shares gain on basic resource, oil stocks; Zodiac plummets

Reuters Staff

2 Min Read

LONDON, March 15 (Reuters) - European shares rose on Wednesday, boosted by strength in basic resource and oil stocks, while French aeroplane seat-maker Zodiac plummeted after its latest profit warning.

The pan-European STOXX 600 index gained 0.4 percent in early deals. Potentially divisive elections and a U.S. Federal Reserve policy meeting that could signal how much monetary tightening to expect during the remainder of the year are events in focus for market participants.

A recovery in oil prices after a sharp sell-off over the past week spurred a relief rally in basic resources stocks. The sector index were the top gainers, up 2 percent, followed by an index of major European oil-related stocks which rose 1.3 percent.

Oil prices rebounded after a surprise U.S. crude stockpile drawdown eased worries about a supply glut.

Amec Foster , Wood Group and Tullow Oil were among the best-performing oil services and oil producer stocks, up 3 to 3.5 percent.

British drugmaker Hikma was up 7.2 percent after it posted a rise in full-year operating profit, up 2.4 percent on growth in its injectables and branded business, which offset weakness in its generic drugs.

Zodiac fell 12.8 percent, the top European faller, after it warned on profit after the close on Tuesday. The company, which engine maker Safran is seeking to acquire, said it sees full-year operating income falling 10 percent against a previous forecast of a 10-20 percent rise.

Zara owner Inditex fell 1.8 percent after it posted a 10 percent rise in profit for 2016. The broader European retail sector was the worst-performing sector, down 0.7 percent, with Swedish peer H&M also down 4.5 percent. (Reporting by Helen Reid, Editing by Vikram Subhedar)